Department Stores in China

PROSPECTS

Department store sales rebound due to continuous restructuring efforts

According to the survey of China Commerce Association for General Merchandise (CCAGM), the 85 surveyed department stores saw total sales value increase by 9% in 2017. Other metrics including operating area, profits and the number of sales employees also experienced slight growth.

Lower-tier cities become the growth engine for department stores

Tier-1 cities are seeing some department stores shutting down, mainly caused by the keen competition within the already matured marketplace and the emerging shopping malls with better decoration and a broader range of products. However, in view of regional differentiation, in lower-tier cities especially from the northern region, department stores still dominate the marketplace.

Omnichannel integration is imperative for the new-format department stores

Omnichannel integration has become the crucial trend for department stores in China; building “physical stores + online platform + real-time inventory” digitalisation mode is regarded as the primary key factor for them to enter the New Retail world. The leading department stores have already launched mobile apps as omnichannel touchpoints in recent years, mainly for promoting newly launched products, pushing sales information and organising membership schemes.

COMPETITIVE LANDSCAPE

SKP launches department store in Xi’an that aggressively caters to premiumisation

SKP, the sales champion of single department stores in Asia, launched its new outlet in Xi’an in May 2018. SKP Xi’an aims to build a high-end lifestyle complex catering to the premiumisation trend, targeting fashion-hungry consumers in Xi’an and nearby cities, who used to go to Shanghai or Beijing for their luxury shopping.

Less well-performing department stores shift to city outlet stores

Closure and store adjusting has been the keyword for department stores for years. After nine months’ adjusting, Shanghai Orient Yangpu Shopping Center, a famous traditional department store under Bailian Group, restarted its business as a city outlet store at the beginning of 2018.

Beijing Wangfujing sustains its top place driven by optimising its sales coverage

Beijing Wangfujing maintained its top place in department store in terms of sales value in 2017, with a double-digit growth rate and maintained solid growth in 2018. The growth is the result of its 10-year constant effort to expand its sales channels.

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